The U.S. Court of Appeals for the Sixth Circuit has given Social Security a stay in the Steigerwald v. Saul class action lawsuit.
Steigerwald has to do with the computation of benefits to which a claimant
is entitled in a case where Disability Insurance Benefits (DIB) and
Supplemental Security Income (SSI) are both approved and the claimant
is represented. To oversimplify, the needs based SSI benefits are
supposed to be reduced because of the DIB payments. However, a
represented claimant does not receive the entire DIB payment because
some of it is used to pay the attorney. Should the SSI benefits be
reduced by money the claimant never sees because it's used to pay the
attorney? The answer is no but Social Security had been failing to do it that way which led to the class action lawsuit.
The District Court had given Social Security only until September 25, 2019 to do the redeterminations. The Court of Appeals has given Social Security two years.
My opinion is that while the September 25, 2019 date was unrealistic, two years is way too long. Social Security should have known that it was going to lose Steigerwald from the day it was filed some two years ago. They had already lost another class action on this issue many years ago. Social Security should have gotten going far earlier. Foot dragging shouldn't be rewarded.
7 comments:
To be precise, SSA has lost at least two class actions on this issue one in California and one is Tennessee.
So in essence, taxpayers are paying the SSI attorney fees?
How about making it fair so attorney fees are only withheld from a SSA disability person's retro pay when there is worker's comp offset or public disability offset instead of the whole amount before offset? Isn't that fair?
@2:32
Sortof. SSI benefits are paid out of the general treasury, whereas DIB benefits are paid out of the social security trust funds. In either case, attorney fees are distributed prior to 25 percent of benefits being released to the recipient. Attorney fees rarely exceed 25 percent, and only reach it in some instances, and if the fees awarded are less than 25 percent, SSA releases the remaining amount to the recipient after the fee issue is decided. So in all instances, taxpayers pay the attorney fee, it's just a question of whether general tax revenue, or social security tax revenue, is the source.
That said, the issue here is because SSI is offset by DIB because the receipt of DIB is considered income to the SSI recipient. That calculation was not accounting for the fact that some of the DIB benefits went to the attorney, not the recipient. Logically, only benefits actually received by the DIB recipient should be applied against the SSI amount as income.
As to whether SSA should start only withholding from a disabled person's retroactive pay when there is a worker's compensation or public disability offset, I'm not sure how that is relevant. It's not a matter of fairness, it is a question of whether income never received by someone should be held against them...seems like the answer is pretty easy, which might be why SSA is not fighting against the fact that it is their error and they are trying to correct it.
The stay was granted to allow SSA time to be able to actually do the recalculations, and the district court said to get it done in roughly half the time SSA said they can get it done in. Not actually sure what the rush is. If SSA has agreed to fix the issue, and the recipients are already in active payment, I believe it is appropriate to get it done right, not necessarily immediately.
Hey 2:32,
Quite frankly, the taxpayer should pay the attorney fees. These are disabled people who had their disability insurance benefits unjustly withheld.
I bet SSA would stop denying qualified claimants if they had to fork out additional money for attorney fees.
@ 11:33 AM
" Logically, only benefits actually received by the DIB recipient should be applied against the SSI amount as income."
Doesn't SSI count the gross wages a recipient is paid against them, not the net? The attorney fee is money they didn't receive directly but it is their money that is used to pay the attorney that represented them. In other words, a bill that they owed. Had SSA not withheld the attorney fee and the SSI recipient just paid the attorney directly, would you argue that the SSI person should not have that income counted against them? I am pretty sure that most of the retro money received goes to pay past due bills for rent or other items, perhaps one could argue that money shouldn't be counted either as the recipient really didn't get to keep it.
@10:12
11:33 here. If you mean SSI counts gross earnings, not net, in regard to reduction due to income, I believe that is correct. But income tax refunds are not considered income and given the standard deduction's size, I believe it pretty much comes out to a wash. Assuming the SSI recipient is not earning enough to be disqualified, any taxes withheld will be returned to them and not impact SSI at that point.
As to whether the attorney fee should be counted as income due to it being a benefit to the claimant, no, because that does not place the recipient in a position where they are in less need of benefits. Logically, I get where you are coming from, but the system is meant to address the current needs of the recipient (or at least current during the relevant time period).
As to whether SSA should count the attorney fee based on whether it is withheld by SSA where the recipient never received it, versus paid by the recipient directly, that's a good example. If the recipient earned money in order to pay the attorney fee during the relevant time period, then it would make sense that that income would reduce their needs and offsetting SSI based on that income is appropriate. How a recipient chooses (or chose) to spend their income (i.e. hiring an attorney) is not relevant; their needs were lessened by that income.
As to retro money going to pay past bills for rent and other items, that's literally a standard argument under the system already.
https://secure.ssa.gov/poms.NSF/lnx/0500835482
Having a bona fide loan agreement for in-kind support and maintenance (rent, utilities, etc.) can result in the SSI reduction being lessened.
How do I get paid from this? I get social security disability. Do I have to go somewhere and sign up for this or will Social Security automatically direct deposit the amount like they normally do my monthly check?
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